Santa Monica Staggering Public Pension Liability Only Ranks 12th in the State
City's race to pay it's employees as much as possible, does put it in the top 1% of California municipalities
February 26, 2017
It has long been known that Santa Monica gives it's employees stupendous wages and benefits. 112 City of Santa Monica employees make more than $250,000 per annum.
SMPD Beat policemen make on average, $102,000 a year, and can retire with a full pension at 55 years of age. The City Manager makes $425,000 a year (no, that's not a typo). And so on down the line.
Now pensiontracker.org has ranked California cities by pension debt per household. We would like to report that Santa Monica is the most encumbered City in California, but it wouldn't be quite true. That distinction belongs to the City of Irwindale, with a household debt of $174,000 per year.
The City of Santa Monica ranks 12th on the list, between the City of Monterey and the City of Berkeley. Household debt to the City pension fund, is a mere $30,809 a year in Santa Monica, for each family of four. No problem, right?
That's a bit deceiving, however. Irwindale is most famous as the home off the Irwindale Event Center, se below,, and has a very small population of 1,422. So the statistic is somewhat skewed.
Still, when you consider there are 1000 or so municipal entities in California, 12th is not too shabby. This is all according to a Stanford University research institute study. We asked City Public Information Czar Constance Farrell about these statistics. She said: "You can’t look at pension debt as an isolated number."
"It has to be considered in connection with revenue as well as the accumulated assets to pay pension liabilities. When you look at pension liability and revenue, Santa Monica falls in the middle of Pension Tracker’s list ranking 188th or 215th when looking at debt as a percentage of operating expenditures. Santa Monica is ahead of the state on this. We have 75% of our pension liability paid for - $1.2 billion of $1.5 billion. The state’s pension obligations are 68% funded," said Farrell.
"The City of Santa Monica has a history of smart fiscal planning so that we are sustainable in the long-term. City Council has approved cost saving measures, including the commitment to pay down a minimum of $1 million of unfunded liability annually with $31.4 million paid down at the end of the last fiscal year. City employees are currently paying an average of 25% of total pension costs. We will continue to pay down our pension liability and will be seeking additional employee cost sharing contributions during future labor negotiations."
Employee pension obligations for the City reached a total of more than $2.6 billion in 2015, according to the university's Institute for Economic Policy Research, a think-tank that analyzes public pensions throughout California.
Anyway, here's that list. Now you know why the City Council plans to develop that property at 5th and Arizona, the East end of the Airport runway, and basically every square inch of property they can find. Because they have to.
Market Pension Debt per household, 2015
1 City of Irwindale Los Angeles $174,034
2 County of Alpine Alpine $76,989
3 City of Santa Fe Springs Los Angeles $60,702
4 City of San Francisco San Francisco $55,802
5 City of El Segundo Los Angeles $52,888
6 City of Beverly Hills Los Angeles $50,099
7 County of Sierra Sierra $41,729
8 City of Palo Alto Santa Clara $39,217
9 City of Culver City Los Angeles $35,796
10 City of Brisbane San Mateo $32,502
11 City of Monterey Monterey $31,194
12 City of Santa Monica Los Angeles $30,809
13 City of Berkeley Alameda $30,192
14 City of San Bernardino San Bernardino $30,060
With relatively few residents, Irwindale consists mostly of rock quarries, which are the major revenue source for the city. The Irwindale Event Center is also located in the city, as is the Santa Fe Dam Recreation Area near the San Gabriel River, a plant of the Miller Brewing Company, and a plant of the Huy Fong Foods sriracha sauce company.